Regions and Cities at a Glance 2018 – PORTUGAL http://www.oecd.org/regional

Economic trends in regions

Regional gap in GDP per capita, 2000-16 Index of regional disparity in GDP per capita, 2016

GDP per capita in USD PPP Top 20 % richest over bottom 20% poorest regions 2016 2000 Ratio 45 000 4 Small regions Large regions Highest region (TL3) (TL2) 40 000 Lisbon 35 000 35 812 USD 3 30 000 Portugal 27 198 USD 25 000 2 Lowest region 20 000 North 15 000 22 980 USD 1 10 000 2000 2005 2010 2016

Country (number of regions considered) Differences between Portuguese regions in terms of GDP per capita have decreased over the last sixteen years. This decrease is due to a fall in GDP per capita in Lisbon metropolitan region since 2010 and moderate growth in the region North since 2013. Portugal recorded the 3rd largest reduction in regional economic disparities between 2000 and 2016 among OECD countries and had the 4th lowest regional economic disparities in 2016 among 30 OECD countries with comparable data. With a productivity growth of 1.9% per year over the period 2000-16, Madeira had the highest productivity growth among Portuguese regions, narrowing the gap with the Lisbon metropolitan region. While Lisbon metropolitan region had the lowest productivity growth of all seven Portuguese regions (0.2% per year), it remains the most productive region in Portugal. Youth unemployment rates are above the OECD average in all Portuguese regions. The North region has the highest youth unemployment rate in 2017 at 25.9%, ten percentage points above the OECD average, but has managed to half youth unemployment since 2013. Productivity trends, most and least dynamic regions, 2000-16 Youth unemployment rate, 15-24 years old, 2007-17

GDP per worker in USD PPP Lisbon Metropolitan: rate (% ) 80 000 highest productivity in 60 75 000 2016 and lowest 50 Highest rate 70 000 productivity North 40 65 000 growth(+0.2% average 25.9% annual growth over 60 000 30 Portugal 2000-16) 55 000 Portugal 23.9% 20 50 000 Madeira: highest OECD Lowest rate 10 45 000 productivityLisbon Metropolitan: growth Central Portugal (+1.9%lowest productivityannually) 40 000 0 20.8% growth (+0.2% annually) 2000 2005 2010 2016 2007 2012 2017 Source: OECD Regional Database. Notes: (1) Figure on regional gap in GDP per capita: OECD regions refer to the administrative tier of subnational government (large regions, Territorial Level 2); Portugal is composed of seven large regions. (2) Figure on index of regional disparity: top (bottom) 20% regions are defined as those with the highest (lowest) GDP per capita until the equivalent of 20% of national population is reached, this indicator provides a harmonised measure to rank OECD countries, using data for small regions (Territorial Level 3) when available. (3) Productivity is measured as GDP per employee at place of work in constant prices, constant Purchasing Power Parities (reference year 2010). Updated the 5th of March 2019 Differences in well-being across regions

Top region Bottom region Lisbon Metropolitan Regions

Azores

Azores top top 20% Lisbon Lisbon Central

Metropolitan Metropolitan Portugal (1 to 402) to (1

Central Lisbon Algarve Portugal Metropolitan Azores

Madeira middle middle 60% Lisbon Lisbon Metropolitan Metropolitan Madeira

North Ranking Ranking OECD of regions Alentejo Madeira Lisbon Metropolitan Azores Alentejo Central Azores bottom bottom 20% Azores Portugal

Health Access to Safety Housing Community Jobs Environment Civic Education Income Life services Engagement Satisfaction Relative ranking of the regions with the best and worst outcomes in the 11 well-being dimensions, with respect to all 402 OECD regions. The eleven dimensions are ordered by decreasing regional disparities in the country. Each well-being dimension is measured by the indicators in the table below.

All seven Portuguese regions are among the top 35% of OECD regions in environment (air quality). The largest regional disparities are found in health and access to services: regarding the former, Lisbon ranks among the top 35% of OECD regions and Azores in the bottom 15%. The high performing Portuguese regions fare better than the OECD median region in life expectancy, mortality rate, broadband access, homicide rate, rooms per person, employment rate, air pollution, and worse than the OECD median region in the other six indicators. In the high performing regions, 63.4% of the labour force has at least an upper secondary degree, 18 percentage points below the OECD median region.

Country OECD median Portuguese regions Average region Top 20% Bottom 20% Health Life Expectancy at birth (years), 2016 81.3 80.4 81.7 80.0 Age adjusted mortality rate (per 1 000 people), 2016 7.6 8.1 7.3 8.5 Access to services Households w ith broadband access (%), 2017 76.0 78.0 85.0 69.9 Safety Homicide Rate (per 100 000 people), 2016 0.6 1.3 0.5 0.9 Housing Rooms per person, 2016 1.9 1.8 2.1 1.9 Community Perceived social netw ork support (%), 2013 86.3 91.4 87.9 82.6 Jobs Employment rate 15 to 64 years old (%), 2017 67.7 67.7 69.8 65.2 Unemployment rate 15 to 64 years old (%), 2017 9.3 5.5 7.5 10.3 Environment Level of air pollution in PM 2.5 (µg/m³), 2015 7.1 12.4 6.1 9.5 Civic engagement Voters in last national election (%), 2017 or lastest year 56.7 70.9 60.1 48.0 Education Labour force w ith at least upper secondary education (%), 2017 52.0 81.7 63.4 46.3 Income Disposable income per capita (in USD PPP), 2016 14 495 17 695 17 624 12 631 Life Satisfaction Life satisfaction (scale from 0 to 10), 2013 5.3 6.8 5.4 5.1 Source: OECD Regional Database. Visualisation: https://www.oecdregionalwellbeing.org. Notes: (1) OECD regions refer to the first administrative tier of subnational government (large regions, Territorial Level 2); Portugal is composed of seven large regions. (2) Household income per capita data are based on USD constant PPP, constant prices (year 2010).

Updated the 5th of March 2019 Metropolitan areas in the national economy

OECD population is concentrated in cities* Percentage of population in cities, 2016

UnitedPortugal States OECD average

people people in cities outside cities people 40% with population 30% people in cities 10.3 million above 500 000 1.2 billion outside cities 44% 55% with population people - 56% people - 70% above 500 000 live in cities live in cities people in cities with 6% population between 3% 50 000 and 250 000 9% 13% people in cities with people in cities with population between population between people in cities with population 250 000 and 500 000 between 250 000 and 500 000 50 000 and 250 000 Source: OECD Metropolitan Database. Number of cities: 12 in Portugal and 1 138 in the OECD.

In Portugal, 56% of the population lives in cities of more than 50 000 inhabitants. The share of population in cities with more than 500 000 people is 40% compared to 55% in the OECD area.

Importance of metropolitan areas, 2016 Cities above 500 000 people, 2016 GDP growth, 2000-16 % Portugal OECD average 80 70 63% 58% 60 55% 47% 50 41% 40% 40 30 20 10 0 % of national % of national % of national GDP employment population Taken together, Lisbon and Porto account for 47% of national GDP and 41% of employment. Lisbon metropolitan area ranks in the bottom 40% of OECD metropolitan areas in terms of GDP per capita while Porto ranks among the bottom 20%. The metropolitan areas of Porto and Lisbon have lower air pollution levels than the OECD median region.

OECD Metropolitan areas ranking Cities above 500 000 people

USD PPP 100 000 80 000 GDP per 60 000 40 000 capita, 2016 20 000 0 Top 20% richest Bottom 20% poorest metropolitan areas metropolitan areas

Lev el of air pollution in PM 2.5 (µg/m³) 30 Air pollution 20 (PM2.5), 2017 10 0 Top 20% least polluted Bottom 20% most polluted metropolitan areas metropolitan areas

Source: OECD Metropolitan Database. Number of metropolitan areas with a population of over 500 000: two in Portugal compared to 327 in the OECD. * Note: Cities are defined here as functional urban areas, which are composed by high-density urban centres of at least 50 000 people and their areas of influence (commuting zone). For more information, see: http://www.oecd.org/cfe/regional-policy/functionalurbanareasbycountry.htm.

Updated the 5th of March 2019

Subnational government finance

Subnational government expenditure by function As a share of total subnational government expenditure, 2016

Portugal 00 OECD average

General public services 29% 11 14% General public services

Other 25% 22 15% Other

Economic affairs 18% 33 14% Economic affairs

Education 14% 44 25% Education

Social protection 7% 55 14% Social protection

Health 7% 66 18% Health

Subnational expenditure per capita: USD 1 734 77 USD 6 817

Subnational government expenditure amounts to USD 1 734 per capita in Portugal compared to an OECD average of USD 6 817. In Portugal, this is equivalent to 12.6% of total public expenditure and to 5.7% of GDP. In comparison, across the OECD, subnational government expenditure accounts for 40.4% of total public expenditure and for 16.2% of GDP. General public services and function ‘Other’ (housing and community amenities, recreation, culture and religion; environment; public order and safety) are the two largest spending items for subnational governments in Portugal: together they represent 54% of subnational expenditure compared to 29% in the OECD area. In Portugal, 52% of total public investment was carried out by subnational governments compared to an OECD average of 56.9%.

Role of subnational governments in public investment Subnational government public investment per capita, 2016

USD per capita Portugal OECD average 1 400

1 200 Total public investment 1 000 USD 1 278 per capita 800 Total public investment 3.0% of GDP USD 463 per capita 600 1.5% of GDP Subnational government investment 400 Subnational government USD 727 per capita investment 56.9% of public invest. 200 USD 241 per capita 0 52.0% of public invest.

Source: OECD Subnational Government Structure and Finance Database.

OECD Regions and Cities at a Glance 2018 The 2018 edition of OECD Regions and Cities at a Glance shows how regions and cities contribute to national growth and the well-being of societies. It updates its regular set of region-by-region indicators, examining a wide range of policies and trends and identifying those regions that are outperforming or lagging behind in their country. Consult this publication on line: https://oe.cd/pub/2n9

Updated the 5th of March 2019